Retail TouchPoints: Mystery Shopper Study Shows E-tailers Sacrifice Service For Cost Containment, Efficiencies

The key to e-tailing is the same as the key to physical retailing. Customers want to experience responsiveness, convenience and a minimum of red tape. Give them that and you can save a few bucks on bells and whistles.

Ryan Mathews, Founder, ceo, Black Monk Consulting

Online shopping is such a distracting venture. Cutting service or anything to do with what the customer sees is a bad idea. Online retailers should focus on the back end to see where they can save money. 5 or fewer clicks should be more like a maximum of 3 clicks to checkout. My observations indicate that anything over 3 becomes a distraction and shoppers quickly lose interest.

Doron Levy, President, TheMortgageMachine.ca

It's interesting that online is being subjected to cost containment like the bricks and mortar. This flies in the face of what I've been reading about retailers like Sears expanding operations and Macy's who took over a whole building in SF. It's not like anyone has to reinvent the world, but be at least as good as Amazon. Anything less and without the resources, you're kidding yourself about how well you deliver online.

Bob Phibbs, President/CEO, The Retail Doctor & Associates

Normally, I'd give you the usual answers like better navigation, quicker customer service, etc, etc...all good answers and things that should be standard issue for e-commerce sites.

But I'd like to bring new technology into the equation. I'd like to see wider use of 3D imaging for merchandise. Online retailing is a show and tell business. I've seen it in action--at least the first generation of it--and it should be considered part of customer service.

Len Lewis, President, Lewis Communications, Inc.

Ryan is right: The principles that work for bricks & mortar retailing ought to be applied to e-commerce. Start by making sure that your assortment is aligned with your overall strategy and identification of target consumer. Then make sure you are offering a value appropriate to your brand position. Finally, and most important, execute well: Make sure your site is easy and appealing to navigate, have wanted goods in-stock, ship on time and have liberal return policies. None of this is easy, but it's a winning formula.

Richard Seesel, Principal, Retailing In Focus LLC

Customer service on line is no different than it is for 4-wall. The key ingredient is a company culture that starts at the customer's screen and works backwards through the value chain from a customer's (not the corporate office's) point of view. The second key ingredient is also the same as 4-wall--simplicity. If you can streamline the shopping and purchase process to be simple and intuitive, you win friends and return customers. If done correctly, this also lessens the importance of the call center, which is typically used because the buying process is confusing or counter-intuitive. Customers are not (IMHO) looking for layers of technological gee-whiz or fancy (slow-loading) graphics and they are certainly not looking for annoying surveys and add-ons, which are better used in the post-sale follow-up. In other words, keep the marketing department out of the design process and rigorously vet the process with real customers.

Bill Emerson, President, Emerson Advisors

No surprises here: retailers of any type often cut back on service to save costs...a losing proposition. There needs to be a balance between making your website respond to what your audience is telling you, and proven design elements that make your site effective. Customers will tell you desires that may simply not only be unpractical, but they will also never actually use the features they say they want. Additionally, continue to check all of your competitor sites for updated functionality. Also, look at sites from industries way outside of retail for ideas that are completely transferable to our business.

Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

I have a different take. I wonder if much of the etailing world is becoming like the airline industry (or gasoline retailing, for that matter), where consumers are so hyper price sensitive that cost containment and service reduction becomes that norm.

In airlines, this is clearly a consumer-driven phenomenon. No matter what fliers say in surveys, in reality they will almost always choose the lower priced ticket over better service at a slightly higher price. Frankly, that's how many tend to shop online. Airlines haven't been able to do much to turn this around...will etailers find a way?

Jonathan Marek, Senior Vice President, Applied Predictive Technologies

The history of retailing tells us that cutting back on customer service never pays off. As various retailers have done it in the past, it has led to their competition moving ahead of them or them going out of business altogether. Still, it always seems to be an option that some retailers keep on the table when times get difficult. Unfortunately, it is an option that some retailers still take.

One would think that e-tailers would be somewhat more progressive in their thinking. But, it doesn't appear so. Unfortunately, this is probably more critical in online retailing than in B&M stores.

The online shopping experience is so anonymous that customer service must be the very best. And, with the speed of change in technology, there is no going backwards, just forwards. The challenge for most e-tailers, however, will not just to continue to move forward with improvements in the area of customer interaction, but to keep up with the big guys.

In today's technology environment, the life-cycle curves are shorter by large magnitudes versus what has been experienced historically in retail and the big guys have tremendous focus and resources to stay at the very front of the technology curve.

Gene Detroyer, Entrepreneur, Advisor, Consultant, Professor, Independent

It's rare when I need a customer service phone number, but when I need it, finding one is a real Easter Egg hunt.

It's obvious that eCommerce retailers are trying to keep phone calls to the call center down. I believe this is a potentially disastrous decision, and yes, Amazon, this DOES include you.

Paula Rosenblum, Managing Partner, RSR Research

From the retailer's perspective, there is a lot behind an ecommerce site. The whole operation is quite complex for a retailer right from merchandising, content management, inventory and supply chain. Added to this are the complexities of interacting with multiple vendors. A simple looking website has at least 15-16 components from various vendors. For example, the search service would be provided by one vendor, the image rendering by other, review writing component, payment gateway and many such small components by others. In fact, they often have vendors to manage their customer queries and contact centers. It is just amazing how beautifully it all gels together into an ecommerce site in today's world.

After the dot com bubble burst, retailers realized that they have to build strong back end processes and systems. The excellence in delivery is partly due to retailers' supply chain efficiencies and partly due to the efficiencies brought in by companies like UPS and Fedex. Retailers need to push their contact center providers harder on SLAs to bring in efficiencies.

As for customer experience online, retailers need to focus on creating a personalized experience for the customer and enable a seamless experience across channels, be it website, store or mobile. Costs can be contained by bringing in delivery efficiencies. Perhaps the retailer can explore new business models, both with its vendors and customers.

Shilpa Rao, Retail Consultant, Tata Consultancy Services

In e-commerce, the connection between customer service and revenue is easier to calculate and more dramatic in impact. E-tailers who cut costs and short the experience of customers, particularly Best Customers, will find themselves in hot water in a direct, calculable way.

Why is this so? Because all transactions online are captured and most customer information can be relatively easily linked to that transaction information. Therefore, it is not difficult to calculate annual and a projected 3-year value, and to determine which customers, after a customer service experience, demonstrate a decline in click/open rates as well as a decrease in sales.

In a cost-sensitive environment, it is critical to maintain or even improve the experience for Best Customers, the small group of customers who represent 50%+ of revenue and an even higher share of profit. Through such approaches as priority 800#s, queuing technology and faster response to email, those high value customers will receive treatment that will improve, not damage their relationships, and the company will experience business growth as a by-product.

Mark Price, Managing Partner, M Squared Group, Inc.

The online retailers I have worked with lately meet the criteria at the end of the article, but I didn't see one important element of communications--the use of targeted emails driven by data collected from purchases.

The typical environment is be presented with a list of radio buttons from which to choose newsletters and updates. As a customer, I can check all (or none) of these but in either event, will not receive any emails that indicate that the retailer knows that I bought a certain product and might be interested in a companion product. Reminders to reorder based on quantity purchased would make sense also.

Who has more data than an e-tailer after my purchase? Why don't they use the low-cost data collected to drive relevancy instead of promoting noise?

In my opinion, this should be added to the list of minimum requirements for success.

Bill Hanifin, Managing Director, Hanifin Loyalty LLC

According to the recent Empathica Consumer Insights survey we conducted, the majority of consumers feel customer service in the U.S. is getting worse today. While customers are spending less and have decreased their shopping frequency, they still expect the same (if not more) service when they do go out. It's critical for retailers to respond accordingly, emphasizing great service both in-store and online.

As such, marketing is now a multi-channel initiative, with a company's Operations Department oftentimes dictating how various channels must be used to chase customers and deliver on accessibility and convenience. For example, retailers must not only have a user-friendly and visually appealing online store, but geo-location and eCommerce personalization capabilities are becoming more critical to move a customer into the online checkout process. This can mean letting an online user know whether an item is available in-store and can be picked up locally, or alternatively, what items might appeal to them based on their previous purchases. It will help to customize the eCommerce experience and deliver on the service expectations most desired by consumers today.

On the flip side, in-store marketing tactics can be utilized to encourage consumers to visit your online site for different offerings or special discount offers, such as on overstock items. Ultimately, successful online retailers will know how to implement seamless integration across multiple platforms.

Gary Edwards, PhD, CCO, Empathica, Inc.